If you are a business owner, pensions are still one of the most tax-efficient ways to save for your retirement. you receive rax relief at your highest rate(s) and if your company pays the pension premium for you, their pension contributions on your behalf do not attract employer or employee National Insurance, unlike your salary.

New pensions tax regime
Proposed changes to pension legislation are set to take effect from 6 April 2006 (A-Day), when a single new pensions tax regime will apply to members of all approved schemes (henceforward to be called 'registered schemes'). Virtually all existing approved schemes (occupational, personal, stakeholder and retirement annuity contracts) will be subject to the rules of the new tax regime.

Lifetime Allowance
A single Lifetime Allowance limiting the total amount of pension savings that can benefit from tax relief will be set. In tax year 2006/07 this will be £1.5 million. This will be increased in each subsequent tax year as indicated by the Treasury. Where the value of an individual's retirement benefits exceeds the Lifetime Allowance, a charge of 25 per cent will be levied on the excess fund (55 per cent where the excess is taken as a lump sum). Where the excess fund is used to provide an income, this will be subject to tax at your marginal rate(s).

Tax efficient
Just like other employees, as a business owner you should use your occupational pension arrangements to ensure that your personal affairs are structured as tax efficiently as possible. We can assist you with this.

We can provide you with an informed independent review of your current situation. Please e-mail or contact us for further information.